UK leads the world in tax avoidance

The Tax Justice Network has ranked 64 countries based on how much tax avoidance they enabled, taking into account the size of their economies.

Topping the list was the British Virgin Islands, followed by Bermuda and the Cayman Islands – all British overseas territories.

Jersey, a Crown dependency, was seventh. The UK itself was ranked 13th.

The study said: “The UK with its corporate tax haven network is by far the world’s greatest enabler of corporate tax avoidance… accounting for over a third of the world’s corporate tax avoidance risks.”

The top 10 countries that have done the most to proliferate corporate tax avoidance as compiled by Tax Justice Network and break down the global corporate tax system are:

1. British Virgin Islands (British territory)
2. Bermuda (British territory)
3. Cayman Islands (British territory)
4. Netherlands
5. Switzerland
6. Luxembourg
7. Jersey (British dependency)
8. Singapore
9. Bahamas
10. Hong Kong

Alex Cobham, chief executive at the Tax Justice Network, said: “The hypocrisy revealed by the Corporate Tax Haven Index is sickening. A handful of the richest countries have waged a world tax war so corrosive, they’ve broken down the global corporate tax system beyond repair. The UK, Netherlands, Switzerland and Luxembourg – the Axis of Avoidance – line their own pockets at the expense of a crucial funding stream for sustainable human progress. The ability of governments across the world to tax multinational corporations in order to pay teachers’ wages, build hospitals and ensure a level playing field for local businesses has been deliberately and ruthlessly undermined.

“When our laws for taxing global corporations stop working, the global economy stops working for the vast majority of us. All around us we see inequalities go unaddressed, political extremism unchallenged and democratic institutions faltering – and the thread that runs through it all is a failure to defend progressive taxation. To curtail the corporate tax avoidance that costs hundreds of billions of dollars every year, governments must finally deliver international rules that ensure profits are declared, and tax paid, in the places where real economic activity takes place. Corporations should be taxed where their employees work, not where their ledgers hide.”